Abrdn buys £2.6bn NYSE-listed healthcare funds

Abrdn CEO Stephen Bird

By Mark McSherry

Edinburgh-based investment giant Abrdn plc announced that its US subsidiary Abrdn Inc agreed to acquire the healthcare fund management capabilities of Boston-based Tekla Capital Management LLC.

The deal includes four NYSE-listed healthcare and biotech thematic closed-end funds, totalling £2.6 billion in assets under management (AUM) and £26 million revenues in 2022.

The funds are:

  • Tekla Healthcare Investors (HQH)
  • Tekla Life Sciences Investors (HQL)
  • Tekla Healthcare Opportunities Fund (THQ)
  • Tekla World Healthcare Fund (THW)

As part of the deal, Tekla’s investment team will join Abrdn.

Abrdn manages and administers £500 billion of assets. Its investments business manages £376 billion on behalf of clients including insurance companies, sovereign wealth funds, independent wealth managers, pension funds, platforms, banks and family offices.

“With an impressive track record of over 20 years investing in the healthcare sector, the move will allow Abrdn to draw on their expertise as it looks to build out its offering in this area,” said Abrdn.

“The transaction will also further strengthen Abrdn’s closed-end fund business, where it currently manages £24.2 billion in AUM in US and UK listed closed-end funds, making Abrdn the third largest closed-end fund manager in the world …

“This transaction further builds on Abrdn’s recent acquisition of five closed-end funds from Macquarie Asset Management, four of which were merged into three existing Abrdn funds.

“Abrdn will transition the management of the fifth fund, Delaware National Municipal Income Fund, on 7 July 2023.”

Abrdn CEO Stephen Bird said: “We have been clear that we will continue to invest in opportunities where we see capabilities that we need and that offer compelling value, and this acquisition strongly meets our criteria.

“Tekla is a leader in a field that offers compelling long term growth prospects, supported by demographic trends and the growing role of technology in healthcare.

“With £2.6bn AUM, resilient revenue dynamics, and deep expertise in a market with attractive structural drivers, this deal represents another important step forward for our Investments business …

“Listed closed-end funds have been an area of real strength for Abrdn over many years.

“Now the world’s third largest closed-end fund manager, we have successfully executed more listed closed end fund acquisitions than any other investment manager over the last 15 years, and this deal further cements our leading position in this space.”